The suspension on the ASX comes as Star Entertainment deals with regulatory failures at its troubled casino operations.
Star Entertainment shares have been suspended from trading on the ASX.
The ASX announced on Monday that it was suspending the company from disallowed after if failed to lodged its annual financial results in time last week.
Star, which has seen its share price halve in the past 12 months, went into a trading halt on Friday morning afterthe NSW Independent Casino Commissionreleased the damning findings of the Bell II inquiry into its continuing regulatory failures.
Star is believed to be seeking investor and government support to prop up its ailing casino operations after the NICC said the Bell II report revealedthe company remained unsuitable to hold a casino licence in Sydney.
Star, now headed by former Crown Resorts boss Steve McCann, was scheduled to release its annual financial results on Friday. Those results have now been delayed indefinitely amid the unfolding crisis enfolding the company.
Star has faced growing compliance costs as well as expensive delays in the opening of its flagship $3.6bn Queen’s Wharf casino resort in Brisbane.
As visitors were flocking into the just opened project on the weekend to watch the annual Riverfire fireworks display on the Brisbane River, it is understood Mr McCann was in urgent talks with bankers and investors as he seeks to raise up to $300m in short-term lending.
The Star also has reportedly sought tax relief from both the Queensland and NSW governments although NSW says any “taxpayer assistance would primarily support the Star’s Queensland expansions.”
The cash will be crucial if Star is to avoid breaching its debt covenants, with the next three to six months crucial for the future of the company.
NICC chief commissioner Philip Crawford on Friday said the Bell II report revealed a company that had not moved quickly enough to address the governance and cultural concerns raised in the first Bell report. “It has only very recently turned its attention to dealing with challenges that should have been prioritised earlier,” Mr Crawford said.
“It was unclear whether The Star could feasibly operate under less supervision, when it was exhibiting past behaviours with its licence still suspended.”
New Star Entertainment Group boss Steve McCann.
The second inquiry by Adam Bell SC earlier this year heard a litany of continuing problems at Star including fraud, falsification of gambling welfare checks and a warlike attitude to the regulator and its appointed manager Nicholas Weeks. Mr Weeks is also the manager of Star’s Queensland casino operations.
It is understood Mr McCann has been “open and transparent” with stakeholders about the need to access the funds as quickly as possible, with concerns cost-blowouts under previous management had put the company in a precarious position. If the immediate crisis could be navigated, Star could survive, given its assets exceeded its debts.
Under an agreement with the Queensland Government, Star has not been able to access up to $180m in assets sales, including the offloading of its Heritage hotel and casino buildings, until the completion of Queen’s Wharf. The project only opened last week after a two-year delay and cost blowouts. It is understood Star will not be seeking an equity injection, opting for increased lending facilities to get over its current cash crunch.
Westpac and Barclays were among those underwriting a $450 million refinancing of The Star’s debt facilities last year.
Queensland Premier Steven Miles said his government was having “ongoing discussions with Star regarding their tax arrangements.” “It’s too soon to say the outcome of those discussions, but the most important thing for me is making sure that those 1400 people (who work at Star in Queensland) have their jobs,” said Mr Miles.
Queensland Treasurer Cameron Dick said that when a large Queensland employer encounters difficulties, the government will listen if they ask for support. “However, taxes must be paid and we would expect all taxes are paid,” said Mr Dick.
A NSW Government spokesperson said it was the responsibility of The Star to maintain the financial viability of its business. “The NSW Government’s assessment is that any NSW taxpayer assistance would primarily support the Star’s Queensland expansions,” the spokesperson said. “The NSW government continues to monitor the situation.”
In a trading update released in June, Star warned higher costs associated with remediation as well as difficult economic conditions would continue to bite.
Revenue in the fourth quarter is expected to be down 4.3 per cent from the previous quarter and 3.3 per cent lower than the prior corresponding period. Annual group revenue would be between $1.67bn and $1.68bn, while earnings are to be in the range of $165m to $180m, Star forecast in June.
Star’s casinos in Sydney, Gold Coast and Brisbane are expected to drop more than 13 per cent, 23 per cent and 18 per cent, respectively in the quarter.
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